Pound (GBP) Buoyed by Positive Market mood
The Pound (GBP) traded with modest gains at the start of this week as an upbeat market mood helped to underpin the increasingly risk-sensitive currency.
This uptick in Sterling was also supported by the publication of the of the Confederation of British Industry’s (CBI) Industrial orders release. December’s figures reported a smaller-than-expected contraction in order growth.
In the absence of any notable GBP data, domestic headlines may drive the Pound today. Concerns over industrial action and the potential disruption to the UK economy could drag on Sterling.
Euro (EUR) Flat despite Upbeat German Data
The Euro (EUR) traded in a narrow range on Monday, despite a positive German IFO business climate index.
While the index reported a better-than-expected improvement in business sentiment this month, it was not enough to offset concerns over the war in Ukraine, amid fears of another large Russian offensive in the new year.
The publication of the Eurozone’s consumer confidence figures will likely act as the primary catalyst of movement for the Euro today. Could an improvement in household sentiment help to buoy the Euro?
US Dollar (USD) Dented by Risk-On Flows
The US Dollar (USD) trended lower through yesterday’s European trading session as a prevailing risk-on mood sapped the appeal of the safe-haven currency.
Tempering these losses however was a continued rise in US Treasury yields amid the prospect of a higher terminal rate from the Federal Reserve in 2023.
Looking ahead, with US data still thin on the ground today movement in the US Dollar is likely to remain linked to investor risk appetite. Will a continued improvement in market sentiment push USD lower again?
Canadian Dollar (CAD) Steady as Oil Prices Rise
The Canadian Dollar (CAD) held its ground on Monday as an uptick in oil prices helped to offset an underwhelming PPI release.
Australian Dollar (AUD) Subdued Following RBA Minutes
The Australian Dollar (AUD) ticked lower overnight on Monday, with the currency struggling to attract support with the release of the minutes from the Reserve Bank of Australia’s (RBA) latest meeting. The minutes provided no strong indication as to how aggressively the bank will continue to raise rates.
New Zealand Dollar (NZD) Knocked as Business Sentiment Slumps
The New Zealand Dollar (NZD) also faced headwinds in overnight trade. The ‘Kiwi’ being undermined after data showed domestic business confidence collapsed to a record low in December amid concerns over inflation.